3 Small-Cap Stocks We Keep Off Our Radar

Many small-cap stocks have limited Wall Street coverage, giving savvy investors the chance to act before everyone else catches on. But the flip side is that these businesses have increased downside risk because they lack the scale and staying power of their larger competitors.

Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. That said, here are three small-cap stocks to avoid and some other investments you should consider instead.

Pilgrim's Pride (PPC)

Market Cap: $9.51 billion

Offering everything from pre-marinated to frozen chicken, Pilgrim’s Pride (NASDAQ:PPC) produces, processes, and distributes chicken products to retailers and food service customers.

Why Is PPC Risky?

1. Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 1.8% over the last three years was below our standards for the consumer staples sector
2. Demand is forecasted to shrink as its estimated sales for the next 12 months are flat
3. Gross margin of 12.5% is below its competitors, leaving less money to invest in areas like marketing and production facilities

Pilgrim's Pride’s stock price of $40.06 implies a valuation ratio of 9.4x forward P/E. Read our free research report to see why you should think twice about including PPC in your portfolio.

Array (ARRY)

Market Cap: $1.53 billion

Going public in October 2020, Array (NASDAQ:ARRY) is a global manufacturer of ground-mounting tracking systems for utility and distributed generation solar energy projects.

Why Do We Avoid ARRY?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 9.8% annually over the last two years
2. Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
3. Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results

At $10.03 per share, Array trades at 12.1x forward P/E. Dive into our free research report to see why there are better opportunities than ARRY.

Garrett Motion (GTX)

Market Cap: $3.63 billion

A key player in the transition to cleaner vehicles, Garrett Motion (NYSE:GTX) designs and manufactures turbochargers, air compressors, and electric motor technologies for vehicle manufacturers and industrial applications.

Why Does GTX Worry Us?

1. Sales tumbled by 4% annually over the last two years, showing market trends are working against its favor during this cycle
2. Estimated sales for the next 12 months are flat and imply a softer demand environment
3. Revenue growth over the past five years was nullified by the company’s new share issuances as its earnings per share fell by 12.7% annually

Garrett Motion is trading at $18.61 per share, or 10.7x forward P/E. To fully understand why you should be careful with GTX, check out our full research report (it’s free).

High-Quality Stocks for All Market Conditions

Check out the high-quality names we’ve flagged in our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.